China giveth and China taketh. Yes, the valuation of Ant Financial, which until recently was one of the world’s largest financial institutions, has been cut. Through an asymmetric attack from the Chinese government on Ant Financial after an own-goal comment by its founder, Jack Ma of Alibaba empire, the company has been decimated.

 A company that was valued more than Goldman Sachs has been taken out of the main league after the government dismantled its money-making operations. That dismantling was ferocious and unparalleled with license withdrawn and operations redesigned by fiat rules.

The company whose IPO was put at $300 billion in 2020 is now valued as low as $70 billion! Unfortunately for the American companies which heralded that aborted IPO are not even sure this floor is the lowest. In other words, this company can end up $0 as China continues to work on its magic.

Fintech giant Ant Group Co.’s valuation was trimmed again by global investors who bought private shares ahead of its suspended initial public offering.

Boston-based Fidelity Investments cut its estimate for Ant to $70 billion at the end of May, according to Bloomberg calculations based on filings. That’s down from $78 billion in June last year, and $235 billion just before Ant’s IPO was torpedoed by regulators in November 2020.

We all admire China but things like this make you feel better that you live in Nigeria where, at least, we have the “freedom” to own assets even though we may not be where we can be as a nation. China can wake up and suspend the license of edtech companies worth billions of dollars, and mandate them to become charities, after investors have put hundreds of millions of dollars in these firms. I do not admire such high voltage searchlights on personal properties as they can burn visions and energies.

There is nothing ant-like in these numbers. Yes, Alibaba’s affiliate fintech company, Ant Group (of Alipay), does generate more payment volume than Visa & Mastercard combined! Ant does $18 trillion while the American giants bring in $16 trillion. Ant operates primarily in China while Visa and Mastercard run around the world!

China, why must you spray insecticides on a $300 billion ant?

Comment on LinkedIn Feedback

Comment 1: #china has an alternate view on economics n wealth. We will falter if we try to apply western n capitalistic frameworks to assess China mkt opportunities and China state policies.
A simple point seems to be that China doesn’t see big value in serious concentration of wealth in private pools.

Response 1: “A simple point seems to be that China doesn’t see big value in serious concentration of wealth in private pools.” – that is the revelation indeed. But how do you help people if companies cannot become big and provide jobs, opportunities, etc? When companies become big, the owners are typically rewarded! I cannot see another way China will cut that off.

Comment 2:Jack Ma is nowhere to be seen. Jack Ma is not complaining.

Is the Chinese government spraying insecticides or the people breeding the insect that is harvesting it?

I am not insinuating anything. Just saying, this world where there is no technology for us to publicly listen to the conversation of these world leaders and CEOs is something else.

Respond 2: “Jack Ma is nowhere to be seen. Jack Ma is not complaining.” – how do you know that he is not complaining? When your university is renamed and taken from you. Your company cut into pieces, pushed you out of the Board, dismantled your operating licenses on your cash cow, etc, what do you mean by ” Jack Ma is not complaining”?

Alibaba’s Ant Group (Alipay) – There Is Nothing Ant-like In These Numbers

Nigerian businesses have strived for years without access to digital bookkeeping, exposing them to evitable loss of business transaction records. Recently, the situation opened a huge opportunity for startups trying to fill the gap.

Several startups across West Africa, including Kippa, Bumpa,OZÉ and Bamba, are creating platforms to offer digital bookkeeping services to businesses.

The startups, left with the job of digitizing the data of Small Medium Enterprises (SMEs), an industry reportedly worth more than $200 billion in Nigeria, have been attracting investors who see huge growth potential in the emerging market.

Pastel, a digital bookkeeping startup has announced a seed raise of $5.5 million led by pan-African venture capital firm TLcom Capital. Participating in the seed round are other VC firms such as Global Founders Capital (GFC), Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play and Soma Cap.

The startup has been under the radar. It raised a $620,000 pre-seed last year from some of its existing investors.

Launched in 2020 as Sabi Cash by Abuzar Royesh, Olamide Oladeji and Izunna Okonkwo, Stanford graduate students, Pastel has grown into a multimillion dollar company within a short period.

The company’s ultimate goal is to help small businesses in Nigeria that have stayed offline for years – using non-digital means to store information and essential data, to get their data online. The absence of digital storage for Small Medium Businesses (SMBs) is said to be responsible for the failure of many businesses, many of them couldn’t last longer than five years.

Cofounder and chief growth officer (CGO) Okonkwo said the bookkeeping and customer relationship management Pastel launched last year recorded more than 100,000 merchant sign-ups by December 2021.

Pastel has tried to distinguish itself from other companies offering digital bookkeeping and credit services with a different strategy. Unlike other platforms operating a sort of super app, where all their services are held together, Pastel has made each of its products, Quick Receipt and Pastel Financing, standalone.

This is believed to have boosted the number of enrollments, which stands at over 45,000 active merchant users, in the platform.

“Our thought process was to get traction quickly by solving a merchant’s pain point with a free and easy solution. The next step was to capture value. So we added value capture features to the Sabi app that our customers love. Now we are building a lot more,” Okonkwo said. “The way we’ve thought about it is, as opposed to creating a super app that a lot of other fintechs have or are in pursuit of, we are taking a more platform approach, meaning that any Pastel user can create an account with any of our apps. With the same login they can access all the other solutions that we’re providing.”

Functioning separately, TechCrunch reported that the Quick Receipt app provides businesses with simple invoicing and receipts tools and over 60,000 active merchant users. On the other hand, the Swift Money app, which leverages local saving groups called ajo in Nigeria to provide financing for businesses, has been stealthily built for the last three months through Pastel Financing.

Onboarding ajo, a popular financial scheme in Nigeria where individuals or a group of people contributes money in the care of a leader, the report said the Swift Money app is designed to work with already established ajo leaders and their groups.

The leader assumes an oversight role with tools to look after the group’s activities and interest that involves financing. The leader’s role includes downloading the app to set up profiles for members and helping them to collect and deposit cash in a [Pastel] bank account for savings.

Members of the group are evaluated based on their credit history to ascertain their creditworthiness when they need a loan. Pastel, which runs on a free app, only started making revenue recently and does so by charging interest and a small fee on loans.

The Central Bank of Nigeria (CBN) has carried out an upward review on interest rates paid on savings accounts, directing banks to implement at least 4.2% interest payment on depositors’ funds.

The 4.2% rate represents 30% of the Monetary Policy Rate (MPR) and a significant increase from the previous 0.15%.

The directive was contained in a circular shared by the CBN, dated August 15, 2022, and was signed by Haruna B. Mustafa, Director of Banking Supervision. The directive which was titled “Review of Interest Rate on Savings Deposits,” said the implementation should take effect from August 1.

“It will be recalled that as part of the efforts to ameliorate the impact of the COVID 19 pandemic, the Central Bank of Nigeria reduced the minimum interest rates payable on local currency savings deposits from 30% to 10% of the Monetary Policy Rate (MPR). This was aimed at stimulating growth in the larger economy following the economic-slowdown occasioned by the Pandemic,” the circular said.

MPR is the rate at which the CBN lends money to banks and a benchmark rate for lending in the financial industry. Savings interest rates are the mounts banks pay customers for saving their money with them.

Interest rates on savings deposits were kept at the barest minimum due to economic headwinds affecting the financial service sector. In September 2020, the CBN reduced the minimum interest rate payable on savings deposits from 30% to 10% of MPR that was pegged at 12.5% then. The move was to curtail economic strains emanating from covid-19.

The CBN said the upward review has become necessary as things are beginning to return to normal.

“Following the return to full normalcy and considering the prevailing macroeconomic conditions, it has become necessary to effect an upward adjustment of the interest rate payable on local currency savings deposits.

“Accordingly, effective August 1, 2022, the negotiable minimum interest rate on local currency savings deposits shall be 30% of MPR. This supersedes our letter dated BSD/DIR/GEN/LAB/13/052 on the subject. September 1, 2020,” the CBN said.

Nigeria’s headline inflation rate rose to 19.64 percent in July 2022 on a year-on-year basis, the highest in 16 years and 10 months, according to data from the National Bureau of Statistics (NBS).

Nigerian depositors have decried the number of arbitrary charges on their savings accounts, which has resulted in apathy toward banking as monies kept with the banks depreciate over time.

The 4.2% increase in interest rate is hoped to revitalize depositors’ willingness to deposit their monies in the banks.

The place of shelter as one of the most important necessities of human existence cannot be overemphasized, especially in a country like Nigeria and Lagos State in particular with a startling housing deficit and one of the largest urban populations in the world. 

This of course has prompted the intervention of government through a Regulatory Framework to control one of the most important value points in the Real Estate sector – Tenancies. 

Tenancies are basically Legal relationships between 2 parties known as a Landlord and Tenant whereby the Tenant obtains from the landlord a legal right of occupancy over a piece of Residential or Commercial property for a stated time period in exchange for consideration known as rent. 

Consequently, what this article will aim to do is :- 

– Provide a basic understanding of the Regulatory Framework governing Tenancies in Lagos State particularly. 

– Provide a basic understanding of types of tenancies and a comparison of Tenancies with other forms of property occupancy.  

– Outline the process of how to commence the Recovery of Premises in Lagos particularly. 

– Highlight the grounds for the Recovery of Premises in Lagos particularly. 

What is the Regulatory Framework governing Tenancies in Lagos State? 

Tenancies in Lagos State are governed by the Tenancy Law of Lagos State 2011 via the State High Court & Magistrate Court. 

What are the types of Tenancies in existence in Lagos State? 

The following types of Tenancies are obtainable in Lagos (and the rest of Nigeria generally):- 

• Statutory Tenancies:- These are Tenancies that continue by the operation of law even after the expiration of a valid Tenancy agreement.

• Fixed term Tenancies :- These are tenancies that are designed to last for a fixed term period by the agreement of parties .e.g. Agreements that last from Jan 11,2022- August 20, 2024.

• Quarterly Tenancies – These are Tenancies that last 3 months.

• Monthly Tenancies.

• Weekly Tenancies.

• Service Tenancies :- These are tenancies that exist as employment benefits where the tenant’s employment terms and work description make accommodation provisions very necessary e.g. Barracks.

• Tenancies at will :- This involves the landlord allowing the Tenant continue to occupy the premises.

Does the Tenancy Law of Lagos State apply everywhere in the state? 

No, it doesn’t. Exceptions do exist such as :- 

– Premises used by educational institutions. 

– Residential premises provided for emergency shelters. 

– Residential premises in a care center, hospital or mental health facility. 

– Apapa, Ikeja, Ikoyi & Victoria Island. 

– Rehabilitation treatment centers. 

What is the difference between a Tenancy and a Lease? 

While used interchangeably in everyday practice, especially in Lagos, a Lease is actually a Tenancy Agreement for a term of at least 3 years requiring the documentation and signing of a Deed which should be registered. 

What is the difference between a Tenancy and a License? 

A license is simply a grant of occupancy to a Licensee which entitles him to an occupancy without a proprietary right in the property. Good examples of licenses include: 

– Children in the homes of their parents. 

– Lodgers. 

– Hostel occupants. 

– Hotel Room guests. 

– Squatters. 

What are the most important steps to take in the Recovery of Premises? 

Anyone wishing to recover his property from a tenant on the expiration of his tenancy must serve the tenant with 2 statutory notices being a Notice to quit & a Notice of the Owner’s intention to recover possession of the property. 

The Notice to Quit must be said in the following time frames :- 

– Yearly Tenancies – a 6-month notice. 

– Quarterly Tenancies – a 3-month notice. 

– Monthly Tenancies – a 1-month notice. 

– Weekly Tenancies – a 1-week notice. 

After the expiration of the notice, the landlord will then have to serve the 7-day notice to recover possession of the property on the tenant. 

After this the landlord can then proceed with filing a Court action for an eviction order and rent arrears payment and mesne profits payment (mesne profits are profits that are lost during the period of a Statutory Tenancy which the landlord would have made from renting to other tenants). 

Can i seek to revoke a tenancy or Recovery of Premises on other grounds apart from non-payment of rent ? 

Yes you can. Other grounds for the Recovery of Premises include :- 

– The immediate need for the property by an adult child of the landlord/overriding convenience of the landlords family. 

– The requirement of the premises on public interest grounds. 

– The Tenant being in breach of an express covenant in the Tenancy agreement. 

– The Tenant using the premises for immoral or criminal purposes. 

– The Tenant causing nuisance to other tenants in the premises (consult your lawyer on the legal meaning of Nuisance as a Civil wrong). 

– Where the property has been sold or put up for sale by the landlord. 

– There is need for huge repairs. 

– The tenant has caused by neglect or acts of waste major damage to the property. 

– An eviction notice issued by a public authority (the Lagos State Building Control Agency in most cases). 

What happens if i try to break my way into the premises occupied by the tenant instead of wasting time with going to court? 

This is risky as it can open you to a lot of liabilities in the form of either a court action for damages by the tenant or a Criminal allegation of trespass by the tenant. 

Conclusion : – It is hoped that a good understanding of Recovery of Premises and its procedure has been achieved by virtue of this write-up which will enable Property owners, tenants and Estate Managers make better decisions in the exercise of their rights going forward.